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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Gladstone Investment Corporation (XNAS:GAIN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GAIN
Name:
GLADSTONE INVESTMENT CORPORATION (XNAS:GAIN)
Sector:
14.42M
Industry:
Asset Management
CEO:
Mr. David Gladstone
Total Employees:
69
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GLADSTONE INVESTMENT CORPORATION(GAIN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ASSET MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
14.05
One Month Price Target:
$14.16
Six Month Price Target :
$14.7
Likely Price in One Year's Time:
Ticker:
$15.36
Likely Trading Range Today Under (Normal Volatility)
$14.
Price Upper limit ($) :
$14.11
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$13.41
This week:
$12.62
This month :
$11.19
Other Primary facts
Market Cap:
466.86M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
33.21M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.24%
-15.67%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$17.02
$15.67
$11.08
$12.43
Medium risk (<10%) entry points
Buy Call
Sell Call
$15.22
Buy Put:
Sell Put:
$14.93
$12.87
$13.17
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GAIN
Sharpe Ratio:
0.46%
Comparison:
GAIN, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -42.48% lower than the industry
& is -79.71% lower than the market/S&P 500 average
Average Returns/Yield of
GAIN
Daily returns:
0.02%
Weekly returns:
0.10%
Monthly returns:
0.38%
Yearly returns:
9.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is -49.94% below industry average
Classification:
GAIN, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.39
Statistical test of Returns:
GAIN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.23%
Weekly Volatility:
4.98%
Monthly Volatility:
9.97%
Yearly Volatility:
34.52%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.07%
Volatility in last five trading days has been -52.15% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.56%
Weekly VaR:
-10.19%
Monthly VaR:
-20.38%
How Much Can the price of
GAIN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-70.60%
This translates to price declining to:
$11.55
This translates to price declining to:
$4.13
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
GAIN is a 43.84% riskier investment compared to the market/S&P 500 & is 23.23% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -14.25% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GAIN
Beta in relation to market/S&P 500--1.38
Expected beta in 1 year's time:
0.77
Expected beta in 3 year's time:
1.089
Unlevered (debt free) Beta:
-
Beta in relation to Nasdaq (XNAS):
0.659
Beta in relation to all global stocks::
0.742
Beta Comparison & Analysis
Beta of competitors/peers::
0.832
Beta is 66.35% higher than peers
Average Industry Beta:
1.694
Beta is -18.32% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.56%
Sustainable growth rate is -51.89% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.080
Alpha is 44.14% above industry average alpha yield
Alpha is -511% below the market average
Analysis of Cost of Capital of
GAIN
Equity cost of capital:
0.126
Equity cost of capital is -14.41% below industry mean WACC
Unlevered (without debt) cost of capital:
-
Before-tax cost of debt:
7.65%
After-tax cost of debt:
6.04%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
6.04%
WACC is 49.93% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$3.23
Revenue growth rate per share of (3Y):
1.11
Annual revenue growth rate is -129.62% below industry average
EPS:
$3.08
Expected Annual growth rate of EPS (3Y):
8.72%
Expected future EPS growth rate is -68.60% lower than the Asset Management industry
Free cash flow (FCF) per share:
$1.07
Balance sheet equity growth per share: 3.75%
Equity growth rate per share is -82.28% lower than the industry
Debt per share
$5.15
EBITDA per share
-$1.41
Valuation Analysis Today of
GAIN
P/E Ratio:
6.94
P/E Ratio of Competitors/Peers:
32.5
P/E ratio is -78.65% lower than main peers & is -57.01% lower than the industry
Stock price/value with industry average P/E ratio: $49.74
GAIN is -71.75% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $34.62
Present value of the expected future dividends only: $3.21
P/S (Price to Sales ratio):
4.34
Price to sales ratio is -36.59% below the industry mean
P/B (Price to book value ratio):
1.11
Price to free cash flow: 13.12
-
Net income growth rate (3Y):
-31.96%
Net income growth rate is -121.98% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 59.81%
Dividend yeild: 2.14%
Previous Dividend: $0.08
Previous adjusted dividend: $0.08
Previous Dividend: $0.30
Expected next dividend best case: $0.09
Expected next dividend worst case: $0.06
Average dividend payment (long-term): $0.08
Average dividend increase/decrease (growth rate) % per period: 3.00%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 20/09/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 22/06/2022
-
Dividend History:
2022-06-21--$0.08
2022-04-21--$0.08
2022-02-17--$0.08
2022-05-19--$0.08
2022-03-22--$0.08
2022-02-03--$0.12
Dividend growth rate is -45.67% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
40.67%
Net debt to equity ratio:
34.30%
Debt to assets ratio:
23.98%
Net debt to assets ratio:
20.23%
Debt-to-asset ratio is -54.11% below industry average
Ability to repay debt:
Interest coverage ratio:
-3.58
Interest coverage ratio is -106.02% less than industry average
Looking forward:
Debt growth rate:
-17.48%
Annual debt growth is 153% higher than industry average debt growth rate
Debt repayment rate in last quarter: 5.68%
Analysis of Key Statistics
Correlation of price movement with the market:
0.634
Statistical significance of correlation:
GAIN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.576
Stock price is 10.00% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.576
Correlation of price movement with Nasdaq (^IXIC):
0.064
Covariance of price movement with the market:
0.083
Kurtosis
10.063
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.753
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
GAIN
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
100%
Effective Tax Rate:
-
-
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
3.56%
Return on equity (ROE) is -85.90% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.10%
Return on assets (ROA) is -63.98% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.78
Current ratio is -53.59% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 6.2 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.6M
Each employee generates 12% more revenue than industry average revenue per employee
EBITDA generated per employee:
- 678.7K
Each employee generates -11% less EBITDA than industry average revenue per employee
Profit generated per employee:
217.2K
Each employee generates -118% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
209.0K
Each employee generates -274% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -274% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
GAIN
DONEGAL GROUP INC. (XNAS:DGICA)
HOMETRUST BANCSHARES, INC. (XNAS:HTBI)
NGAC
WEST BANCORPORATION, INC. (XNAS:WTBA)
OXFORD LANE CAPITAL CORP. (XNAS:OXLCO)
KHOSLA VENTURES ACQUISITION CO. (XNAS:KVSA)
APXT
NORTH ATLANTIC ACQUISITION CORPORATION (XNAS:NAAC)
PENNANTPARK INVESTMENT CORPORATION (XNYS:PNNT)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
107.38M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
6.79M
-
6.40M
6.40M
-
-
6.40M
59.65M
13.08M
- 74900.00K
- 46832.00K
-
14.99M
14.99M
-
14.99M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
11.53M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 44252.00K
Net Cash Provided by Operating Activities:
14.42M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
6/30/21
2022
Q1
26.80M
-
26.80M
4.39M
-
-
-
-
-
-
678.59M
-
-
-
713.19M
713.19M
2.63M
-
-
-
-
-
171.05M
-
171.05M
463.71M
292.65M
33.00K
- 7190.00K
-
427.70M
June 30, 2021 at 6:00:00 AM
-
420.54M
713.19M
-
171.05M
144.3M
-
-
-
- 10300.00K
-
-
- 8965.00K
29.73M
10.46M
-
24.88M
27.28M
2.40M
14.42M
-
14.42M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
GAIN
2023
2024
2025
2026
2027
$15.44
$46.59
$50.92
$55.65
$60.83